USD/RUB has weakened notably in recent quarters. Currently, the Russian exchange rate is solely driven by the current-account balance. Economists at Commerzbank share their USD/RUB forecast.
Rate hikes do not have direct FX implications
Due to the sanctions, the RUB exchange rate now only reflects current account flows. Hence, the Ruble is likely to depreciate medium-term due to the declining current account surplus.
Russia’s central bank (CBR) continues to be orthodox and cautious, maintaining its former credible style of monetary policy. At least one more rate hike appears quite likely. Rate hikes, however, do not have direct FX implications at this time around.
Source: Commerzbank Research
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